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Why Is It Still Hard to Find an Apartment in New York?

Despite many people moving away from urban epicenters during the pandemic, rental properties are still hard to find. According to the U.S. Census Bureau, from April 2020 to July 2021, New York City’s population declined by about 336,677 people (4%). Other sources say more people are leaving New York than moving here. So why is it so difficult to find cheap options for rental apartments? New York’s rental vacancy rate was 2.6% in August, the lowest among major cities, and rents in New York are significantly higher than in any other major city. 

Monthly rent reports showed that the average rent for a Manhattan property located exceeded $4,000  over the summer and likely won’t fall any time soon. Since the pandemic, rent growth in Manhattan and Brooklyn, and Queens, has slightly outpaced current inflation. In many other American cities and suburbs of New York, rents and purchase prices have also risen sharply. But here in New York, the population is shrinking, so you’d expect rent prices to trend in the opposite direction. The figures above reflect how deregulated the rental market is in New York City, despite the state legislature passing the Rent Act of 2019, which led to the introduction of housing regulation. As it is, rents and vacancies are increasing. If you want to find a more affordable option, you should contact a realtor in Buffalo NY, where an experienced specialist can choose the right real estate option for you within your budget.

Different types of available real estate, different price segments

One of the factors causing the misalignment between vacant real estate and increasing rental rates is the types of properties that are in demand. People coming to New York City have different real estate needs than those leaving New York City, so the total population may not accurately reflect housing demand. Many families with children left the city at the beginning of the pandemic, and since then, apparently, many young single people have arrived. So even though the population has decreased, there is an equal, if not greater, demand for individual housing units.

Shifts in the job market also put pressure on the rental market. While low-wage sectors such as retail and catering experienced staffing declines, some high-wage sectors such as the IT industry, legal services, and consulting are actively developing. These new company employees are looking for different types of rental real estate, which is why they turn to real estate agents in New York to help them find their dream homes.

There are not enough new houses

New York is currently the most densely populated metropolitan area in the United States, and getting a new building project off the ground isn’t the easiest. For starters, there’s not much ground to start on! New builds often start with a demo of the previous structure, which adds to the cost. However, there were over 200,000 new housing units approved during the pandemic. But can the builders keep up with the demand?

Commercial housing is expensive in large cities, due to the stress on the rental market. In addition, the supply of housing in some affluent areas of Manhattan is shrinking. From 2010 to 2020, there was a decline in the number of housing units as buyers shifted to smaller apartment complexes. Decades ago, family houses and condominiums turned into large apartments. The two new residential towers planned for the Upper East Side will also have less living space (although they will be taller) than the low-rise buildings they will replace.

There are not enough rental apartments

After World War II, there were efforts to offer rent-controlled and rent-stabilized apartments across the country. Since 1991, however, the number of controlled or stabilized apartments has decreased by 10%. Additionally, the number of state housing, semi-state development, and other non-market apartments in the city decreased by 35%. Each year from 2010 to 2019, an average of 7,244 units moved from regulated to non-regulated apartments. The cost of rent has skyrocketed, and landlords have powerful incentives to raise rents and evict less affluent tenants. 

Confusion over the latter phenomenon led to the passage of state rent laws in 2019 that limit rent increases for renovations, eliminate high rents, and make apartment conversions more difficult. On the other hand, the drag on rental prices affects more apartments than the new rental law. The 2021 Housing and Jobs Survey found that the rental vacancy rate was 4.6%, more than double the 2017 rate. But with high rental rates and brokerage fees, renters aren’t able to afford these new openings. Additionally, the number of homes in the city classified as “vacant, not for sale or rent” has doubled in the last decade, so there are empty, unused buildings around the city.

There are more and more empty apartments in New York

Some real estate owners hold on to vacant housing for renovations, investment purposes, and short-term rentals, leaving empty apartments that aren’t open for long-term leases. The people who keep empty apartments have attracted a lot of negative attention during the housing debate in New York. A change in the methodology of the real estate survey and housing assessment also contributed to the number of empty apartments. Another possible reason for the increase in vacancy is that such apartments are either depreciating or being pushed out of regulated status. 

The type of contract with a real estate agent is important when looking for real estate to rent. If you decide to sell or rent a property, you and the agent must sign a real estate agency agreement. This is a contract that defines the obligations that the real estate agent is willing to fulfill. It must be completed in writing. You can choose between two types of mediation contracts: an open contract and a private contract. Open contracts allow you to work with more than one real estate company. This means that your New York apartments and houses may be listed by multiple realtors. Although this form of contract is very popular, it also has several disadvantages. First, properties offered by different agencies are not as attractive properties to advertise as properties provided by only one, reputable, experienced agency. The agent can be sure that the time and effort spent on selling the property is worth it. In addition, real estate companies tend to limit their client base. These companies will offer more support and a wider range of services to their more exclusive contracts.

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